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Comment by Neil44 | Hacker News Reader

To take a random example, AstraZeneca has 50,000 employees and R&D centres around the globe. They produce a sucessful blockbuster drug every, say 5 years roughly? So you could say that development costs are on the high side of high.

Also, if you had those mouths to feed and you had no cast iron plan of when your next blockbuster was coming you would seek to maximize short term profit also.

I don't want to defend profiteering but I don't see the issue being all that black and white.

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I don't think anyone can genuinely make that call without the actual numbers. And I wouldn't trust those that are not truly independent. I agree that it is not completely black & white, but I would be surprised if someone is not profiting from it heavily - and possibly the wrong people paying for this (ethically / morally).

too much regulation. No patents, no approvals, and you don't need 50k+ employees and years to find out a drug doesn't work. Under current system we wouldn't be able to approve aspirin for goodness sake. It just wouldn't go through FDA:

http://www.medicalprogresstoday.com/spotlight/spotlight_inda...

Haven't we had enough of high prices and stagnation in pharma already?

So says a Koch mouthpiece, at least. Your source likely isn't really interested in keeping medical care costs down - they oppose letting Medicare negotiate drug prices, push fracking, etc. It's an industry group like the AEI.

http://www.sourcewatch.org/index.php/Manhattan_Institute_for...

http://en.wikipedia.org/wiki/Manhattan_Institute_for_Policy_...

without the actual numbers.

Profit margins in the pharmaceutical industry are the highest[1] of all industries, only rivaled by the banking sector.

The top 3 pharma companies spend twice as much money on marketing as on R&D.

[1] http://www.bbc.com/news/business-28212223

You do realise how marketing works? The idea is that the money spent on marketing is more than recuperated. You could argue that without the money spent on marketing, that R&D budges would be significantly lower.

Marketing has next to nothing to do with R&D because most R&D is accomplished before market entry of a drug.

It looks as if revenues of one drug fuel investment into new drugs, and that may be true but it is misleading. There are a lot more sources of capital than just one particular companies own revenues.

Margins and marketing budget allow us to assume significant market power in favor of the pharma companies.

It would be interesting to know exactly what the marketing money is going towards. Is the money going to doctors so they push the drugs? or to pharmacies so they push their drugs over others? or to consumers?

What is all that money being spent on?

Doctors go to medical conferences to learn about new developments. Pharma companies were/are giving away all kinds of free stuff to doctors (e.g. coffee machines). Moreover they were/are paying for the cost of going to those conferences, sometimes abroad (essentially a sponsored "holiday"). The pharma companies are also giving drugs for free to doctors for a while, ostensibly to test for side effects after the drug has already been approved. The doctor gets compensation for participation in this "research" (no doubt this money is in the R&D budget rather than the marketing budget). The net effect is that a doctor gets paid to use a particular brand. Doctors in hospitals get some drugs for free. When the patient leaves the hospital, he/she will of course continue with the same drug rather than switch to a different brand. The total cost for the patient can be far higher than with some generic brand. These are just some of the marketing strategies pharma companies use.

I'd just like to add that after chatting to some pharma. reps (who coincidentally are VERY well spoken, no doubt they've received training in this) that have told me if they can get even just 1 patient on their life long drug (as seems to be the trend for pharmacy research) , it'll more than pay off for the free lunch they bought you.

I really don't understand this. Say you have late-stage melanoma, and you go to an oncologist. Either there is a good treatment for your disease, or there is not, judged objectively by the doctor from clinical data. Where is the room for marketing in this?

Doctors are busy. They don't have time to read each and every journal article on the latest and greatest treatments. Sales reps can come in and highlight the key differentiators for their drugs (the FDA also makes them call out the negatives).

Sales reps also help with a lot of the non-sales aspects as well (getting reimbursement for the doc, helping patients who can't afford the drug).

You are correct that if you have the best drug out there by far sales reps don't really drive that much in sales. However, it's tough to convince marketing that they don't need sales reps at all, so even for the best drug they hire them.

Doctors are actually required to keep up on their discipline with annual retraining requirements, right? They are not to be forgiven for being behind in treatments.

In reply to Joe (the reply button appears disabled for me). Yes doctors, as with professionals in other fields are encouraged to keep up to date with the literature.

However they're exquisitely busy people, and no one is paying them to spend the time to keep up to date. Sure, there are programs that encourage it (usually called 'Continuing Medical Education') but they're often very weak, easily ignored and there is a lot of pushback by doctors themselves against them). If you take a look at the volume of information coming out every day, coupled with the fact most of the papers just plain suck, you'll realise how it's pretty much impossible to stay afloat.

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Ill be frank as well (junior dr here). They buy you lunch weekly, often for the whole establishment (your practice, the hospital, etc.). In the ye olde days they erherm..'sponsored' vacations for doctors to for example, Hawaii. It could be like a 1 week vacation, where they'd require you to spend half a day learning about their drug and going through their marketing spiel with you. In return they'd host your flights, accomodation and food (trust me the food is good).

Not all marketing is TV ads or sales jobs to doctors.

In this hypothetical case, marketing $$ were spent to discover that existing late state melanoma treatments were lacking in some important respect (efficacy, side effects, cost...), and that there was a sufficient market to continue the expensive process of developing a potential treatment.

A lot of that marketing is just a zero sum game, like pepsi vs coke.

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